ITAT WEEKLY ROUND-UP [ June 7th - 20th ]

Eyegear OpticsIndia Private Limited vs Dy.Commissioner of Income Tax CITATION : 2025 TAXSCAN (ITAT) 1030

Hyderabad Bench of Income Tax Appellate Tribunal (ITAT) has set aside an order passed by the Commissioner of Income Tax (Appeals), National Faceless Appeal Centre (NFAC), observing that the CIT(A) failed to adjudicate on the question of jurisdiction in a time-barred reassessment proceeding before remanding the case. The appeals were filed by Eyegear Optics India Private Limited against the Deputy Commissioner of Income Tax, Circle 8(1), Hyderabad, for the Assessment Years 2012–13 and 2013–14.

The assessee challenged the validity of reassessment orders passed under Section 147 read with Section 144 of the Income Tax Act, 1961, on the ground that the proceedings were initiated beyond the permissible time limit under the first provisio to Section 147. In particular, the company argued that its original assessment under Section 143(3) had been completed on 26.03.2016, and the reopening notice under Section 148 issued on 31st March 2019 was barred by limitation in the absence of any failure on the part of the assessee to disclose material facts.

ITAT Restores Assessee’s Case for Fresh Consideration: Rules Ex-parte Dismissal by NFAC Violated Principles of Natural Justice

Airona TilesLimited Ceramic City vs The DCIT Circle Himatnagar CITATION : 2025 TAXSCAN (ITAT) 1032

The Ahmedabad Bench of the Income Tax Appellate Tribunal (ITAT) has set aside the ex-parte order passed by the Commissioner of Income Tax (Appeals), National Faceless Appeal Centre (NFAC), Delhi, in the case of the assessee Airona Tiles Ltd., restoring the matter for fresh adjudication. The appeal was made on the assessment proceedings for the Assessment Year 2016–17. Airona Tiles Limited, a company engaged in the business of manufacturing and selling ceramic glazed tiles, had filed its return declaring an income of ₹62,63,380. However, the Assessing Officer (AO), after selecting the case for complete scrutiny, made several additions amounting to ₹16,36,864. These additions made the total assessed income ₹79,00,240.

ITAT Restores 80G Application of Assessee: Rejection Held Premature and in Violation of Natural Justice

Shri BhattMewada Brahm Samaj vs The Commissioner of Income Tax CITATION : 2025 TAXSCAN (ITAT) 1031

The Ahmedabad Bench of the Income Tax Appellate Tribunal (ITAT) has restored the matter of assessee Bhatt Mewada Brahm Samaj to the file of the Commissioner of Income Tax (Exemption), Ahmedabad [CIT(E)] for fresh adjudication. The case pertains to an application filed by the assessee under Section 80G(5)(iii) of the Income Tax Act, 1961, for permanent approval, following an earlier provisional registration under the same provision. The trust has been engaged in charitable activities since January 28, 2010, focusing on work in the fields of education, healthcare, youth development, and environmental awareness.

ITAT Bars Late PF/ESIC Deductions, Follows Supreme Court's Ruling in Checkmate Services

Shree ShivamAttires Pvt. Ltd vs Assistant Commissioner of Income Tax CITATION : 2025 TAXSCAN (ITAT) 1033

The Raipur bench of the Income Tax Appellate Tribunal (ITAT) dismissed an appeal upholding the disallowance of ₹25.81 lakh claimed as a deduction for Employees’ Provident Fund (PF) and Employees’ State Insurance Corporation (ESIC) contributions deposited after the statutory due date but before filing the return, relying upon the Supreme Court ruling in Checkmate Services P. Ltd. v. Commissioner of Income Tax-1, (Civil Appeal No. 2833 of 2016)

The appellant Shree Shivam Attires Pvt. Ltd., filed its return of income for Assessment Year(AY) 2018-19, declaring total income at ₹6,81,34,000 after claiming deduction of ₹25,81,110 under Section 36(1)(va) read with Section 43B of the Income Tax Act, 1961 with respect to the amount deposited towards the PF/ESIC. Centralized Processing Centre (CPC) processed the return and disallowed the deduction, on the ground that the contributions were not credited to the relevant fund on or before the statutory due date.

ITAT Sets Aside Rejection of 12A Application: Trust Gets Another Chance to Prove Genuineness

Gramya VikasPratishthan Koba vs The CIT (Exemption) CITATION : 2025 TAXSCAN (ITAT) 1034

The Ahmedabad Bench of the Income Tax Appellate Tribunal (ITAT) has recently remanded a matter relating to a trust back to the Commissioner of Income Tax (Exemptions) [CIT(E)], Ahmedabad, for fresh adjudication. The Tribunal found that the rejection of the trust’s application for registration under Section 12A of the Income Tax Act, 1961, was premature and in disregard of principles of natural justice.

Gramya Vikas Pratishthan Koba is a charitable trust registered under the Bombay Public Trusts Act, 1950, with its formation dating back to July 21, 1972. Over the decades, it has operated as a public-spirited entity, holding valid registration under Sections 12A and 80G of the Income Tax Act, and filing returns of income regularly. However, with the introduction of new compliance mandates under Section 12A(1)(ac), it became necessary for trusts to reapply for registration under the amended regime.

ITAT Deletes Penalty for Non-Filing of Form 15CA as Rules Were Notified Late for Non-Taxable Remittances

Gopal Chandakvs The Assistant Commissioner of Income Tax CITATION : 2025 TAXSCAN (ITAT) 1035

The Surat Bench of Income Tax Appellate Tribunal (ITAT) deleted the penalty imposed for failure to file Form 15CA on non-taxable foreign remittances, observing that although Section 195(6) of the Income Tax Act,1961 was amended effective June 1, 2015, the rules prescribing the form and procedure were notified only from April 1, 2016.

Gopal Chandak,appellant-assessee,made outward remittances during the year under consideration for importing machinery from various foreign countries. On verification, the Assessing Officer (AO) observed that the assessee did not furnish the necessary certificate, Form No. 15CA, for all remittances made after June 1, 2015.

ITAT Deletes Penalty for Non-Filing of Form 15CA as Rules Were Notified Late for Non-Taxable Remittances

Gopal Chandakvs The Assistant Commissioner of Income Tax CITATION : 2025 TAXSCAN (ITAT) 1035

The Surat Bench of Income Tax Appellate Tribunal (ITAT) deleted the penalty imposed for failure to file Form 15CA on non-taxable foreign remittances, observing that although Section 195(6) of the Income Tax Act,1961 was amended effective June 1, 2015, the rules prescribing the form and procedure were notified only from April 1, 2016.

Gopal Chandak,appellant-assessee,made outward remittances during the year under consideration for importing machinery from various foreign countries. On verification, the Assessing Officer (AO) observed that the assessee did not furnish the necessary certificate, Form No. 15CA, for all remittances made after June 1, 2015.

ITAT Remands Case in Reassessment Dispute after Assessee Seeks Fresh Opportunity, Imposes Cost for Non-Compliance

NaimishbhaiKantibhai Patel vs The Income Tax Officer CITATION : 2025 TAXSCAN (ITAT) 1036

The Ahmedabad Bench of the Income Tax Appellate Tribunal (ITAT) remanded a reassessment matter involving the assessee, Naimishbhai Kantibhai Patel, to the file of the Assessing Officer (AO) for de novo adjudication. The Tribunal found that the assessee had not complied with the procedural requirements before both the Assessing Officer (AO) and the Commissioner of Income Tax (Appeals). It imposed a cost of ₹5,000 for the non-compliance, payable to the Prime Minister’s Relief Fund.

The case relates to Assessment Year (AY) 2016–17, in which the appellant, Naimishbhai Kantibhai Patel, filed an appeal against the order dated October 21, 2024, passed by the National Faceless Appeal Centre (NFAC). The order confirmed the reassessment proceedings initiated under Section 147, read with Section 144, of the Income Tax Act, 1961.

ITAT Orders Recalculation of Presumptive Income u/s 44 After Spotting Turnover Discrepancy

Mintu Mallickvs Income Tax Officer CITATION : 2025 TAXSCAN (ITAT) 1037

The Kolkata bench of the Income Tax Appellate Tribunal (ITAT) directed the Assessing Officer to recalculate the taxable income of the appellant under the presumptive taxation scheme of Section 44AD of the Income Tax Act, 1961, after finding a mismatch in the turnover figures declared.

Mintu Mallick, appellant-assessee a trader dealing in building materials, had declared his income for the Assessment Year 2017–18 under Section 44AD, showing a turnover of ₹53.89 lakh. However, during assessment proceedings, the Income Tax Officer observed that the Profit & Loss Account disclosed a higher turnover figure of ₹79.86 lakh. This discrepancy led to an addition of ₹25.97 lakh to the assessee’s income, treating it as unexplained.

ITAT Deletes ₹1 Crore Addition, Rules Refunded Advances Can't Be Taxed as Income

M/s LahotiIndia Ltd. vs ITO CITATION : 2025 TAXSCAN (ITAT) 1038

The Income Tax Appellate Tribunal (ITAT) Kolkata Bench has ruled in favor of Lahoti India Ltd., deleting an addition of ₹1 crore made by tax authorities on advances received by the company. The tribunal held that since the money was refunded to the parties, it could not be treated as taxable income.

Lahoti India Ltd, appellant-assessee which had received cash advances totaling ₹1,00,02,000 (1 crore) from four companies for the sale of land. However, on the same day the money was received, an armed robbery took place at the company’s office, and the entire amount was stolen.

ITAT Condones 148-Day Delay, Remands Case to CIT(A) Due to Assessee's Medical Grounds and Legal Oversight

Sandeep Prasadvs Income Tax Officer, Durgapur CITATION : 2025 TAXSCAN (ITAT) 1039

The Income Tax Appellate Tribunal (ITAT) Kolkata Bench has condoned a 148-day delay in filing an appeal, accepting medical reasons and legal oversight as valid grounds. The tribunal directed the case to be reconsidered by the Commissioner of Income Tax (Appeals), giving appellant another opportunity to present evidence.

Sandeep Prasad, a resident of Panagarh, West Bengal, had filed an appeal challenging an addition of ₹31.16 lakh made by Income Tax authorities for alleged unverified cash deposits in his bank account. The delay occurred because Prasad was suffering from a brain-related illness during the appeal filing period, as supported by medical certificates. Additionally, his legal consultant failed to file the appeal on time.

ITAT Deletes ₹1.2 Crore Addition, Cites Lack of Evidence in Jewellery Stock Discrepancy Case

M/s. Kiran FineJewellers Pvt. Ltd. vs The DCIT CITATION : 2025 TAXSCAN (ITAT) 1041

The Income Tax Appellate Tribunal (ITAT), Jaipur Bench, has ruled in favor of a Jewellery deleting additions of over ₹1.2 crore made by the tax department due to alleged discrepancies in cash and jewellery stock during a search operation. The tribunal found the department’s claims lacked supporting evidence and ignored the assessee’s explanations backed by documents.

Kiran Fine Jewellers, appellant-assessee, a Jaipur-based jewellery company, which faced additions of ₹11.76 lakh for unexplained cash, ₹6.57 lakh for excess silver jewellery, ₹41.48 lakh for excess 18-carat gold jewellery, and ₹3.67 lakh as profit on alleged unaccounted sales of 22-carat gold jewellery. The additions were made after a search in August 2017, where the department claimed discrepancies in the company’s records.

Income Tax Dept cannot deviate from Stand Taken in Vodafone Case: ITAT Grants Relief to Bharti Airtel on Disallowance of Roaming Charges for Want of TDS

Bharti AirtelLtd vs Assistant Commissioner of Income Tax CITATION : 2025 TAXSCAN (ITAT) 1047

The Delhi Bench “A” of the Income Tax Appellate Tribunal (ITAT) recently granted relief to Bharti Airtel in a case involving the disallowance of Tax Deducted at Source (TDS), noting that the Income Tax Department cannot deviate from the binding precedent and promulgation made by the Karnataka High Court in the case of CIT vs. Vodafone South Ltd. (2023 TAXSCAN (HC) 1161).

The decision was rendered by the ITAT while adjudicating two-part cross appeals filed by Bharti Airtel Ltd. against the Assistant Commissioner of Income Tax, Circle 4(2), Delhi and vice versa originating from the finances of Airtel from assessment years (A.Y.) 2007-08 and 2008-09.

ABN Amro Bank, Stockholm not Swedish Resident as per DTAA: ITAT holds Bharti Airtel required to Deduct TDS on Loan Interest

Bharti AirtelLtd vs Assistant Commissioner of Income Tax CITATION : 2025 TAXSCAN (ITAT) 1047

The Delhi Bench of the Income Tax Appellate Tribunal (ITAT) recently held that Bharti Airtel Ltd. was obligated to deduct tax at source (TDS) on interest payments made to ABN Amro Bank’s Stockholm branch, rejecting the Airtel’s pleas of bona fide belief in exemption from conducting the same.

The decision was rendered by the ITAT while adjudicating two-part cross appeals filed by Bharti Airtel Ltd. against the Assistant Commissioner of Income Tax, Circle 4(2), Delhi and vice versa originating from the finances of Airtel from assessment years (A.Y.) 2007-08 and 2008-09.

ITAT Sets Aside 80G Rejection, Cites Gross Violation of Natural Justice in Charitable Trust

SecretCharitable Trust 213 vs The CIT (Exemption) Ahmedabad CITATION : 2025 TAXSCAN (ITAT) 1044

The Ahmedabad Bench of the Income Tax Appellate Tribunal (ITAT) has quashed the rejection order passed by the Commissioner of Income Tax (Exemption), [CIT(E)], denying approval under Section 80G(5)(iii) of the Income Tax Act, 1961, to the assessee Trust. The Bench found that the assessee was not given a fair opportunity to respond, constituting a serious breach of natural justice.

Secret Charitable Trust, a public charitable trust registered under the Gujarat Public Trust Act, 1950, was granted registration under Section 12AA and provisional approval under Section 80G(5)(iii) in September 2023. As required under the Income Tax Act, the Trust subsequently filed Form 10AB seeking final approval under Section 80G(5)(iii).

Section 80G Registration Denial: ITAT remands Utilization of Total Income towards Religious Purposes for Reverification

Shree BhandariGnyati Mandal vs Commissioner of Income Tax CITATION : 2025 TAXSCAN (ITAT) 1048

In a significant ruling for charitable trusts seeking tax‐exempt status, the Income Tax Appellate Tribunal (ITAT), Ahmedabad Bench has set aside the Commissioner of Income Tax (Exemption)’s refusal to grant Section 80G registration to Shree Bhandari Gnyati Mandal. The Bench, comprising Judicial Member Shri Siddhartha Nautiyaland Accountant Member Shri Narendra P. Sinha, remanded the case to the Commissioner for a fresh examination of whether the trust had applied less than five percent of its total income toward religious activities, as permitted by law.

The trust established to support members of the Bhandari community—a recognized backward class in Gujarat—applied for approval under Section 80G(5)(iii) of the Income Tax Act, 1961. This section allows donors to claim deductions for contributions to institutions dedicated to charitable purposes.

Gift of Property Share from Husband to Wife Eligible for Capital Gain Exemption, But Clubbing and Capital Gains Rules Apply: Rules ITAT

Kavita ManojDamani vs ITO INT Tax Ward CITATION : 2025 TAXSCAN (ITAT) 1049

The Mumbai Bench of Income Tax Appellate Tribunal (ITAT) ruled that gift of property share from husband to wife is eligible for capital gain exemption under Section 54 of Income Tax Act,1961, but held that clubbing provisions and capital gains rules would still apply.

Kavita Manoj Damani,appellant-assessee, had filed her return declaring income of Rs. 29.6 lakh. The case was selected for scrutiny to examine the capital gains exemption claimed under Section 54. The Assessing Officer (AO) later denied the exemption of Rs. 3.96 crore and added it back to her income.

ITAT reaffirms Principle of Consistency: Directs AO to Retain Long-Standing Expense Allocation Method for Sysmex India Pvt Ltd

Sysmex IndiaPrivate Limited vs Dy. CIT CITATION : 2025 TAXSCAN (ITAT) 1050

The Mumbai bench of Income Tax Appellate Tribunal (ITAT) in a recent ruling directed the AssessingOfficer (AO) to accept the sales-based allocation of common expenses for computing deduction under Section 80-IC of the Income Tax Act, 1961, noting that the method was consistently followed by the assessee and accepted by the department in the past, and any deviation to the same would constitute a breach to the rule of consistency.

The appellant, Sysmex India Pvt Ltd, engaged in the manufacture and distribution of diagnostic instruments and reagents, filed its return of income for the Assessment Year (AY) 2017–18.

The return was selected for scrutiny and the AO sought justification for allocation of expenses between the eligible undertaking at Baddi, Himachal Pradesh which qualified for deduction under Section 80-IC and non-eligible undertakings.

S.80-IC Deduction Must Be Computed Solely on Eligible Unit’s Profit, ITAT Bars Set-Off of Non-Eligible Unit Losses

Sysmex IndiaPrivate Limited vs Dy. CIT CITATION : 2025 TAXSCAN (ITAT) 1045

The Mumbai bench of the Income Tax Appellate Tribunal (ITAT) recently reaffirmed that deductions under section 80-IC of the Income Tax Act, 1961 must be computed solely on the profit of the eligible unit, without setting off losses from non-eligible units.

The appellant, Sysmex India Pvt Ltd, engaged in manufacturing operations across multiple units, including an eligible unit located at Baddi, Himachal Pradesh which qualifies for deduction under Section 80-IC, filed its return for Assessment Year (AY) 2017–18.

Customer Contracts and Assembled Workforce are “Intangible Assets”: ITAT Allows Genpact’s Depreciation Claim on Acquisition of Debt Collection Firm Acquisition in 2010

GenpactServices LLC vs Assistant Commissioner of Income Tax CITATION : 2025 TAXSCAN (ITAT) 1051

The Delhi Bench of the Income Tax Appellate Tribunal (ITAT) allowed Genpact Services LLC's claim for depreciation on customer contracts and assembled workforce, holding that these qualify as intangible assets under the Income Tax Act, 1961.

Genpact Services LLC, the Indian branch of a U.S.-based company, had acquired a debt collection and analytics business from Genpact India Pvt. Ltd. in Financial Year 2009-10. As part of this acquisition, the company paid Rs. 22.16 crore towards customer contracts and the assembled workforce.

Relief to Louis Vuitton: ITAT Holds Bright Line Test not valid Method for making TPA on Advertisement, Marketing & Promotion

Louis VuittonIndia vs DCIT CITATION : 2025 TAXSCAN (ITAT) 1052

In a significant relief for luxury retail giant Louis Vuitton India Retail Pvt. Ltd. (LV), the Delhi Bench of the Income Tax Appellate Tribunal (ITAT) ruled that the Bright Line Test (BLT) cannot be considered a valid method for making transfer pricing adjustments (TPA) relating to Advertisement, Marketing, and Promotion (AMP) expenses.

The Indian wing of the French luxury fashion had filed the present appeal against the order passed by the Deputy Commissioner of Income Tax, Circle-1(1), Gurgaon with regards to its financials for the Assessment Year (A.Y.) 2020-21.

ITAT Favors Micromax in ₹16 Cr FD Interest and Section 14A Dispute; Quashes Revision Order

MicromaxInformatics Ltd vs Pr. Commissioner of Income Tax CITATION : 2025 TAXSCAN (ITAT) 1053

In a recent ruling, the Delhi Bench of the Income Tax Appellate Tribunal (ITAT) granted relief to Micromax Informatics Ltd. by quashing a revision order concerning Rs. 16 crore fixed deposit (FD) interest and disallowance under Section 14A made during the original assessment.

Micromax Informatics Ltd., a company engaged in the trading of electronic goods, filed its income tax return for the Assessment Year 2018-19, declaring a loss of over Rs. 158 crore. The return was scrutinized, and the AO completed the assessment under Section 143(3), accepting the returned income after making detailed inquiries.

Offshore Supply Contracts Are Not Taxable u/s 44BBB: ITAT Quashes Tax Demand Against Chinese Company for Income from Turnkey Power Project Supplies

Shenhzhen SDGInformation Co vs Commissioner of Income Tax CITATION : 2025 TAXSCAN (ITAT) 1054

The Delhi Bench of Income Tax Appellate Tribunal ( ITAT ) quashed tax demand against Chinese company for income from turnkey power project supplies, holding that offshore supply contracts are not taxable under section 44BBB of Income Tax Act,1961.

Shenhzhen SDG Information Co. Ltd., appellant-assessee,was aggrieved by the Commissioner of Income Tax(International Taxation)[CIT(IT)]’s order under section 263, which treated offshore revenue of ₹64.37 crore from equipment sales in China as taxable in India under section 44BBB.

Processing Intimation under section 143(1) of Income Tax Act without giving 30 days time to assesee is bad in law: ITAT Sets aside order against Samsung C & T Corporation

Samsung C And TCorporation India Pvt. Ltd. vs Deputy Commissioner of Income Tax CITATION : 2025 TAXSCAN (ITAT) 1056

The New Delhi bench of the Income Tax Appellate Tribunal (ITAT) setaside order against Samsung C & T Corportion as the processing intimation under section 143(1) of Income Tax Act, 1961 without giving 30 days time to assesee is bad in law.

Samsung C And T Corporation India Pvt. Ltd, the assesse challenged the order of the National Faceless Appeal Centre, Delhi/ Ld. CIT(A) dated 31.05.2023, arising out of intimation under section 143(1) of the Income Tax Act, 1961 (‘the Act’), dated 30.03.2019 for Assessment Year 2017-18. The assessee company filed its return of income under section 139(1) of the Act on 29.11.2017 at NIL income which was revised under section 139(5) on 22.03.2018.

Option Money to be treated as “Capital Receipt”: ITAT Directs AO to Recompute Capital Gains on Dabur’s Sale of 23% Stake in Aviva JV

ACIT vs DaburInvest Corp CITATION : 2025 TAXSCAN (ITAT) 1058

In a recent case, the Income Tax Appellate Tribunal (ITAT) has held that option money to be treated as “Capital Receipt” and directed Assessing Officer (AO) to recompute capital gains on Dabur’s sale of 23 % stake in Aviva JV.

All appeals are filed by the Revenue and Dabur Invest Corp, the Assessee against different orders of the Commissioner ofIncome Tax (Appeals), NFAC, Delhi dated 04.08.2022 for the assessment years 2017-18 & 2018-19.

ITAT Deletes Rs. 24 Lakh Capitation Fee Addition Due to Lack of Evidence Linking Payment to Assessee

Hitesh Rohillavs ACIT CITATION : 2025 TAXSCAN (ITAT) 1059

The Income Tax Appellate Tribunal (ITAT) Delhi Bench has deleted an addition of Rs. 24 lakh made as alleged capitation fee for the assessment year 2013-14.

The case revolved around an assessment order passed u/s 147 and section 143(3) of the Income Tax Act, where the Assessing Officer had added Rs. 24 lakh to the assessee’s income, treating it as unexplained expenditure under section 69C. This addition was based on information received from the Investigation Wing following a search at Santosh Medical College, Ghaziabad, and statements made by Dr. P. Mahalingam, Chairman of the Santosh Group of Institutions.

Application seeking Approval under section 80G(5)(i) Rejected on technical ground without providing Time for Rectification: ITAT allows Rectification

ALUMNIASSOCIATION vs Commissioner of Income Tax CITATION : 2025 TAXSCAN (ITAT) 1055

The Delhi bench of the Income Tax Appellate Tribunal (ITAT) allowed the rectification of error on the application seeking approval under section 80 G (5)(i) of the Income Tax Act, 1961 which was rejected on technical ground without providing time for rectification. Alumni Association, the assessee challenged the order dated 17/12/2024 of the Commissioner of Income Tax (Exemption) whereby the application of the assessee seeking approval under section 80G of the Act, 1961 was rejected.

The assessee has submitted that the Commissioner of Income Tax (Exemption) has rejected the application on technical ground for mentioning the section 80G(5)(i) in the application, instead of 80G(5)(iv). She has further submitted that the Commissioner of Income Tax (Exemption) has not pointed out this defect/mistake in the application before passing the impugned order and therefore, the assessee was not given an opportunity to rectify the mistake if any in the application filed by the assessee.

Ethiopian Airlines’ Income from Simulator Training to FSTC, Dubai Not Taxable in India, Rules ITAT

EthiopianAirlines Group vs ACIT CITATION : 2025 TAXSCAN (ITAT) 1057

The Delhi Bench of Income Tax Appellate Tribunal (ITAT) ruled that the income earned by Ethiopian Airlines from providing simulator training services to Flight Simulation Technique Services (FSTC), a Dubai-based company, was not taxable in India.

Ethiopian Airlines Group,appellant-assessee, had an agreement with a Dubai-based company, FSTC, to provide flight simulator and pilot training services. FSTC’s group company in India, Flight Simulation Technique Centre (P) Ltd. (FSTL), had signed contracts with airlines like Jet Airways, Vistara, Indigo, and GoAir to provide simulator training for pilots.

ITAT Upholds Rule of Consistency: Rental Income from Leased Property Taxable as 'House Property', Not 'Business Income

The A.C.I.T vsM/s IHDP Globals Pvt Ltd CITATION : 2025 TAXSCAN (ITAT) 1060

The Income Tax Appellate Tribunal (ITAT) New Delhi Bench has reaffirmed the principle of consistency in tax treatment by ruling that rental income earned from leasing property should be taxed under the heading 'Income from House Property' and not as 'Business Income'.

IHDP Globals Pvt Ltd, a private limited company primarily engaged in the business of carpet fabrication, which had also earned rental income from leasing out its building situated in Noida to various tenants during the assessment year 2017-18.

ITAT Allows Abu Dhabi Commercial Bank to Set Off PE Losses Against ECB Interest Income, Upholds 5% Concessional Tax Rate Under India-UAE Treaty

Abu DhabiCommercial Bank PJSC Wework India Management Private LimitedC vs DCIT CITATION : 2025 TAXSCAN (ITAT) 1061

The Mumbai Bench of Income Tax Appellate Tribunal ( ITAT ) allowed Abu Dhabi Commercial Bank to set off losses of its Indian Permanent Establishment (PE) against interest income earned on External Commercial Borrowing (ECB) loans and upheld the concessional tax rate of 5% under the India-UAE tax treaty.

Abu Dhabi Commercial Bank,appellant-assessee,was a tax resident of the U.A.E. and had two branches in India,one in Mumbai and the other in Bangalore. During the relevant year, it advanced ECB loans directly to Indian clients through its U.A.E. head office, without involving its Indian branches. As a result, it earned interest income of ₹138.48 crore from Indian customers.

ITAT Quashes Assessments Citing Mechanical Approval u/s 153D

Kapil Garg vsACIT CITATION : 2025 TAXSCAN (ITAT) 1063

The Income Tax Appellate Tribunal (ITAT), Delhi Bench has annulled the assessment orders passed against the appellant for Assessment Years 2013–14, 2014–15, and 2019–20, holding that the approval granted under Section 153D of the Income Tax Act was mechanical and invalid.

Kapil Garg, appellant-assessee who was subjected to a search u/s (Under Section) 132 on 30 July 2018, was issued notices for reassessment u/s 153A. Based on the seized material, the Assessing Officer (AO) framed assessment orders and made various additions. These assessments were approved under Section 153D by the Additional Commissioner of Income Tax (ACIT), Central Range, Meerut on 11 August 2021. The approvals were granted the same day the AO sent the draft orders for approval.

ITAT Quashes Revision Order: No Section 40A(3) Disallowance When Income Estimated via Gross Profit Rate

Mahesh KumarVerma vs Pr. CIT CITATION : 2025 TAXSCAN (ITAT) 1064

The Income Tax Appellate Tribunal (ITAT), Delhi Bench, has set aside a revision order issued under Section 263 of the Income Tax Act against the appellant, ruling that no separate disallowance under Section 40A(3) is warranted when income is already assessed by applying a gross profit rate on unaccounted cash purchases.

Mahesh Kumar Verma, a bullion trader operating under the name Somya Bullion and Jewellers in Chandni Chowk, Delhi, was subjected to a search under Section 132. Consequently, assessments for AY 2015–16 and AY 2016–17 were framed under Section 153C read with Section 143(3), where the Assessing Officer (AO) added a 2% profit margin on unaccounted cash purchases made from Jindal Bullion Ltd (JBL), totalling ₹5.83 crore for AY 2015–16. The AO, however, did not invoke Section 40A(3), which deals with disallowance of expenses where cash payments exceed permissible limits.

ITAT Allows Prior-Period Interest Deduction Citing No Revenue Loss

PrasandiInfotech Park P. Ltd vs ACIT CITATION : 2025 TAXSCAN (ITAT) 1062

The Delhi Bench of the Income Tax Appellate Tribunal (ITAT) has allowed the deduction of prior-period interest expenses for the appellant, holding that there was no loss to the revenue as the lender had already offered the interest income for tax in their returns.

Prasandi Infotech Park Pvt. Ltd., based in Greater Noida, had taken a loan from SREI Infrastructure Finance Ltd. The company entered into multiple rounds of negotiation with the lender between 2015 and 2016, seeking a waiver or reduction in the interest rate from 12% to 8% and a moratorium on interest payment. However, these negotiations did not yield a favourable outcome. It was only on 13 June 2016 that the lender finally rejected the borrower’s proposal, confirming the full interest liability.

CIT(A)'s Order Lacks Detailed Reasoning on Cash Book Discrepancies: ITAT Remands Matter to AO

ITO vs SeemaBhuraram Chaudhary CITATION : 2025 TAXSCAN (ITAT) 1065

The Pune Bench of the Income Tax Appellate Tribunal (ITAT) remanded the matter concerning the addition of unexplained cash deposits under Section 68 of the Income Tax Act, 1961, observing that the Commissioner of Income Tax(Appeals) [CIT(A)] did not provide adequate reasoning or properly examine the discrepancies in the assessee’s cash book and bank accounts.

Seema Bhuraram Chaudhary, the assessee, is an individual engaged in agency services under the name “Om Online Communications,” offering services like money transfers, utility payments, recharges, and ticket bookings through various partnerships. For the assessment year 2018-19, she declared an income of Rs. 14,48,200. The case was selected for limited scrutiny due to substantial cash deposits in her bank accounts.

ITAT Grants ₹203 Cr Tax Relief to Genpact India u/s 10AA for Interest Income, Forex Gains, and Export-Linked Expenses

DCIT vs M/s.Genpact India CITATION : 2025 TAXSCAN (ITAT) 1067

The Delhi Bench of Income Tax Appellate Tribunal ( ITAT) granted ₹203 crore tax relief to Genpact India under Section 10AA of the Income-tax Act,1961, holding that interest income, foreign exchange gains, and export-linked expenses were eligible for deduction.

The Revenue-appellant appealed against the Commissioner of Income Tax (Appeals)[CIT(A)]’s order for Assessment Year (AY) 2013-14 dated 18.10.2024. In this case Genpact India,responden-assessee, clarified that there was a typographical error in the Assessing Officer (AO )’s grounds and that the only issue in dispute concerned the deduction claimed under Section 10AA of the Act. The AO had initially classified interest income as "Income from Other Sources" and denied the deduction, but the final assessment treated it as "Other Business Income."

ITAT Deletes Addition u/s 56(2)(x); Holds Sale Price Below Stamp Duty Value Justified Due to Title Dispute, Variation Within 5% Threshold

DeepakkumarChandulal Shah vs ITO, Ward-4(1)(1) CITATION : 2025 TAXSCAN (ITAT) 1069

The Ahmedabad Bench of Income Tax Appellate Tribunal ( ITAT ) deleted an addition of ₹16,12,245 made under section 56(2)(x) of the Income Tax Act,1961, holding that the variation between the sale consideration and the stamp duty value was within the permissible 5% threshold and that the lower sale price was justified due to a title dispute.

Deepakkumar Chandulal Shah,appellant-assessee, challenged the order passed by CIT(A) dated 28.1.2025 for the AY 2017-18. The dispute was over an addition of ₹16,12,245 made under section 56(2)(x) of the Act. The Assessing Officer found that the sale price of the property was lower than the stamp duty value and treated the difference as income. The CIT(A) confirmed the addition.

Bulk Disposal Indicates Absence of Judicial Mind: ITAT Slams Income Tax Dept

Minda CapitalPvt. Ltd. vs ACIT CITATION : 2025 TAXSCAN (ITAT) 1068

The Delhi Bench of the Income Tax Appellate Tribunal (ITAT) held that the bulk disposal of cases by the Income Tax Department amounts to a mechanical and non-judicious approach in granting approvals under Section 153D of the Income Tax Act, 1961.

The case involved cross-appeals filed by the assessee, Minda Capital Pvt. Ltd., and the Revenue for Assessment Years (AYs) 2016-17 to 2018-19. The assessee challenged the validity of the assessment orders, arguing that the approvals under Section 153D were granted arbitrarily and without proper scrutiny.

‘May Impress a Math Student, Not Income Tax Proceedings’: ITAT Deletes AO’s ₹5.39 Cr Addition Based on Two Days’ Bills

DeputyCommissioner of Income Tax vs M/s. Vividham Sweets & Dry Fruits CITATION : 2025 TAXSCAN (ITAT) 1070

The Income Tax Appellate Tribunal ( ITAT ) in Mumbai has strongly condemned the estimation method used by the Income Tax Department, rejecting a ₹5.39 crore addition made by the Assessing Officer (AO). The tribunal noted that the computation, which was based on bills from just two days, "may impress a student of mathematics but does not make any sense so far as the income tax proceedings are concerned."

The case arose from a survey under Section 133A conducted at the premises of Vividham Sweets on 20 October 2018. During the survey, only two physical cash memos were impounded, one dated 24 October 2018 showing sales of ₹25,467 and another from 25 October 2018 showing ₹68,977.

Explanation to Income Tax S. 12AB(4) on 'Specified Violations' Introduced in Finance Act, 2022 Applies Prospectively Only: ITAT

Lala Sher SinghMemorial Jeevan Vigyan Trust Society vs PCIT(Central)-3, Jhandewalan CITATION : 2025 TAXSCAN (ITAT) 1071

The Income Tax Appellate Tribunal ( ITAT ), Delhi Bench, has held that the Explanation to Section 12AB(4) of the Income Tax Act, 1961, introduced by the Finance Act, 2022, which explains “specified violations” for the purpose of cancelling a trust’s registration, can only be applied prospectively from Assessment Year (AY) 2023-24 onwards and not with retrospective effect.

The decision was made in a batch of appeals submitted by the Florence Nightingale Educational Society, Jindal Charitable Society, and Lala Sher Singh Memorial Jeevan Vigyan Trust Society. All three organizations contested the Principal Commissioner of Income Tax (Central), New Delhi's orders to cancel their long-standing registrations under Section 12AA on the grounds of purported violations that fell under the enlarged definition put forth in Section 12AB(4).

Re-Deposited Cash from Withdrawals Not Turnover: ITAT quashes Rs. 33.7 Lakh Income Addition

Sh. Sita RamSaini vs The ITO CITATION : 2025 TAXSCAN (ITAT) 1073

The Jaipur Bench of the Income Tax Appellate Tribunal (ITAT) allowed the appeal of an individual taxpayer, holding that re-deposited cash from earlier bank withdrawals and cash sales could not be treated as business turnover for computing income under Section 44AD of the Income Tax Act, 1961.

Sh. Sita Ram Saini, the assessee, had filed his return for the Assessment Year 2014–15, declaring total income of Rs. 2,60,490 and agricultural income of Rs. 1,50,280. The case was selected for limited scrutiny due to substantial cash deposits in bank accounts totaling Rs. 79,95,179. Since the assessee did not provide a full explanation during the assessment proceedings, the AssessingOfficer completed the assessment ex parte under Section 144 and treated the entire amount as unexplained cash credit under Section 68 read with Section 115BBE.

Only 3 Out of 26 Gold Transactions Found Bogus: ITAT Orders Re-computation Based on Gross Profit Margin

M/s. ShahTraders vs DCIT CITATION : 2025 TAXSCAN (ITAT) 1072

The Mumbai Bench of the Income Tax Appellate Tribunal (ITAT) held that only 3 out of 26 gold purchase transactions by Shah Traders were bogus and directed the Assessing Officer (AO) to recompute the addition based on the gross profit margin, rather than disallowing the entire transaction value.

Shah Traders, the assessee, is a partnership firm engaged in the gold and jewelry business. For the Assessment Year 2016–17, it filed its return of income declaring Rs. 3.73 crore. The return was processed under Section 143(1) of the Income Tax Act.

ITAT Holds Corporate Guarantee as International Transaction, Grants Relief to Tega Industries by Restricting TP Adjustment to 0.5% Fee

M/s. TegaIndustries Ltd. vs DCIT CITATION : 2025 TAXSCAN (ITAT) 1074

The Kolkata Bench of Income Tax Appellate Tribunal (ITAT ) granted relief to Tega Industries by restricting the Transfer Pricing (TP) adjustment to 0.5% in respect of a corporate guarantee fee, while holding that such a guarantee qualifies as an international transaction under Section 92B of the Income Tax Act,1961.

Tega Industries Ltd.,appellant-assessee, filed its return of income for Assessment Year (AY) 2021-22 on 15.03.2022, declaring total income of ₹118.64 crore. The company was engaged in providing customized solutions to industries such as mining, mineral beneficiation, and slurry transportation.

ITAT Rules in Favor of Assessee: Renovation Expenses Within CBDT’s Extended Deadline Qualify for Section 54F Relief

Rikant Pittievs ACIT CITATION : 2025 TAXSCAN (ITAT) 1082

The Income Tax Appellate Tribunal (ITAT) Delhi Bench ‘F’ has ruled that renovation expenses incurred within the extended deadline set by the Central Board of Direct Taxes (CBDT) are eligible for deduction under Section 54F of the Income Tax Act.

Rikant Pittie had sold shares of Easy My Trip Planners Ltd in March 2021, resulting in a substantial long-term capital gain. To claim relief under Section 54F, which allows exemption from capital gains tax if the proceeds are invested in a new residential property, Pittie purchased a residential house in Gurgaon and incurred significant renovation expenses.

ITAT Remands Case to AO Citing Lack of Opportunity, Orders Fresh Scrutiny of ₹2.15 Cr Demonetization Deposits

Ranjay KumarDiwakar vs ITO CITATION : 2025 TAXSCAN (ITAT) 1083

The Income Tax Appellate Tribunal (ITAT) Patna Bench has sent back a case involving cash deposits of ₹2.15 crore during the demonetization period for fresh examination, highlighting that the assessee was not given a proper opportunity to explain his case.

The order pertains to Ranjay Kumar Diwakar, proprietor of Nidhi Pharma, who had appealed against the assessment order passed by the Income Tax Officer, Ward-2(5), Bihar Sharif for the Assessment Year 2017-18.

ITAT Bars Double Taxation: Protective Addition Deleted as Income Already Assessed Elsewhere

DCIT vs SuryaVanijya P. Ltd. CITATION : 2025 TAXSCAN (ITAT) 1081

The Income Tax Appellate Tribunal (ITAT) Delhi Bench has ruled that a protective addition cannot be sustained when the same income has already been assessed in the hands of another entity, thereby preventing double taxation.

The case arose from a search and seizure operation conducted under section 132 at the premises of Priya Gold Group of Companies and its affiliates. During the course of assessment, it was found that Surya Vanijya Pvt. Ltd (Respondent). had provided accommodation entries in the form of share capital and share premium totalling Rs. 15,23,00,000 to Surya Agrotech Infrastructure Ltd.

ITAT Upholds CIT(A) Ruling, Excludes Business Advances from Deemed Dividend u/s 2(22)(e)

ACIT vsWindlass Steel Crafts LLP CITATION : 2025 TAXSCAN (ITAT) 1085

The Income Tax Appellate Tribunal (ITAT), Delhi Bench ‘F’, has dismissed the Revenue’s appeal against the deletion of an addition made under Section 2(22)(e) of the Income Tax Act, ruling that the payment in question was a business transaction and not a deemed dividend.

The case involved Windlass Steel Crafts LLP, which was originally a partnership firm and later converted into a limited liability partnership on February 25, 2014. During the scrutiny assessment for Assessment Year 2014–15, the Assessing Officer (AO) noticed that the assessee had received advances from Windlass Engineers and Services Pvt. Ltd. (WESPL), a closely held company where two of the partners—Sudhir Kumar Windlass and Pradeep Kumar Windlass—held significant shareholding as well as substantial interest in the assessee firm.

Taxability of Employee Leave Encashment from Govt and Non-Govt Depts must be Examined Separately: ITAT

Tanaji KedariSapkal vs The ITO CITATION : 2025 TAXSCAN (ITAT) 1086

The Income Tax Appellate Tribunal ( ITAT ), Pune Bench has ruled that the taxability of employee leave encashment should be bifurcated between Government and Non-Government departments and must be examined separately. Therefore, the impugned order denying exemption under Section 10 (10AA) of the Income Tax Act, 1961 was reversed by the bench.

The appellant was appointed in the Department of Telecommunications (DoT), a Central Government department, and was later taken into BSNL, which is a Public Sector Undertaking. The assessee worked on both the Department of Telecommunication and BSNL, and he claimed the total leave encashment of ₹10,87,092.

Slight Delay in Filing Form 67 Cannot Take Away DTAA Benefit: ITAT Grants Relief to Microsoft Employee for Salary Received in US

Vivek Tiwari vsACIT, Circle 3 CITATION : 2025 TAXSCAN (ITAT) 1075

The Kolkata Bench of Income Tax Appellate Tribunal ( ITAT ) granted relief to a Microsoft employee for salary received in the US, holding that a slight delay in filing Form 67 cannot take away Double Taxation Avoidance Agreement (DTAA) benefit.

Vivek Tiwari,appellant-assessee,, worked with Microsoft India (R&D) Pvt. Ltd. during AY 2020-21 and received salary in both India and the USA. Since he was a resident under the Income Tax Act, his global income was taxable in India. He filed his return on 28.12.2020, declaring income of ₹72.2 lakh, including ₹58.04 lakh from the USA, and claimed foreign tax credit (FTC) of ₹16.49 lakh. He filed Form 67 for claiming FTC on 18.01.2021, eight days after the due date of 10.01.2021.

CIT(A) Sustains Additions without Considering Virtual Hearing Request: ITAT Remands Matter for fresh Adjudication

Shwas Homes Private Limited vs The Asst.Commissioner ofIncome-tax CITATION : 2025 TAXSCAN (ITAT) 1076

The Cochin Bench of the Income Tax Appellate Tribunal (ITAT) remanded the matter to the Commissioner of Income Tax (Appeals) [CIT(A)] for fresh adjudication, citing the CIT(A)’s failure to consider the assessee’s request for a virtual hearing.

Shwas Homes Private Limited (assessee), a company based in Ernakulam, faced scrutiny for the Assessment Year (AY) 2014-15. The AO made additions to the Income of the assessee. Aggrieved by the additions, the assessee filed an appeal before the Commissioner of Income Tax (Appeals) [CIT(A)].

Delay In Filing Income Tax Appeal Due to Auditor's Death: ITAT Condones 338 Days of Educational Institution

The Centre forManagement Development vs The Asst.Commissioner of Income-tax CITATION : 2025 TAXSCAN (ITAT) 1077

The Cochin Bench of the Income Tax Appellate Tribunal (ITAT) condoned a 338-day delay in filing an appeal by The Centre for Management Development, citing the death of the assessee’s auditor as sufficient cause, and remanded the matter to the Commissioner of Income Tax (Appeals) [CIT(A)] for a decision on its merits.

The Centre for Management Development (assessee), an educational institution faced scrutiny for the Assessment Year (AY) 2022-23. The assessee, a self-supporting autonomous institution based in Trivandrum, filed an appeal against the order of the Assessing Officer (AO), but the appeal was delayed by 338 days.

ITAT Rules 10% Recorded, 90% Live Revenue Split Fair for Sports Broadcast Licensing Income

TRANS WORLDINTRNATIONAL LLC vs Deputy Commissioner of Income Tax CITATION : 2025 TAXSCAN (ITAT) 1088

The Delhi bench of the Income Tax Appellate Tribunal (ITAT) partly allowed an appeal concerning the apportionment of sports broadcast licensing income, where the Assessing Officer (AO) treated the entire amount as royalty.

Trans World International LLC, a US-based company, received Rs. 2.18 crore from Indian broadcasters like Sony Pictures Networks and Taj Television for granting broadcasting rights to various sports events. The assessee treated only 5% of the receipts as royalty for recorded content and claimed the remaining 95% related to live coverage, which was not taxable as royalty.

Income from Live Sports Licensing Not Taxable as Royalty Due to Lack of Copyright Protection: ITAT

TRANS WORLDINTRNATIONAL LLC vs Deputy Commissioner of Income Tax Circle CITATION : 2025 TAXSCAN (ITAT) 1088

The Delhi bench of the Income Tax Appellate Tribunal (ITAT) held that income earned from licensing live sports broadcasts is not taxable as royalty because live broadcasts do not enjoy copyright protection under Indian law.

Trans World International LLC, a company based in the United States, had licensed broadcasting rights for sports events such as football and badminton to Indian broadcasters, including Sony Pictures Networks and Taj Television. The Assessing Officer (AO) treated the entire amount received as royalty under Section 9(1)(vi) of the Income Tax Act and Article 12 of the India-USA Double Taxation Avoidance Agreement (DTAA). The AO argued that the rights involved use of copyrighted material and technical processes and should therefore be taxed as royalty.

ITAT Allows KBS Creations’ Appeal, Rules No Transfer Pricing Adjustment Without Proved ‘Arrangement’ Under Section 80IA(10)

KBS Creationsvs Deputy Commissioner of Income tax CITATION : 2025 TAXSCAN (ITAT) 1090

The Mumbai Bench of the Income Tax Appellate Tribunal (ITAT) has set aside a transfer pricing (TP) adjustment of Rs. 10.98 crore and ruled that the Assessing Officer (AO) failed to establish an arrangement between the assessee and its associated enterprise (AE) as required under Section 80IA(10) of theIncome Tax Act, 1961.

KBS Creations (assessee) a firm engaged in the manufacture and export of diamond-studded jewellery, faced scrutiny for Assessment Year (AY) 2021-22. The assessee operates a unit in the Santacruz Electronics Export Processing Zone-Special Economic Zone (SEEPZ-SEZ) which claimed a deduction under Section 10AA. The AO referred the case to the Transfer Pricing Officer (TPO) due to reported Specified Domestic Transactions (SDTs) with its AE, alleging that the transactions resulted in more than ordinary profits.

Capital Gains Exemption u/s 54F Allowable for Purchase of Residential Property Using Sale Proceeds of Land, as Construction Agreement Was Signed Prior to Sale: ITAT

AvichalKulshrestha vs ITO CITATION : 2025 TAXSCAN (ITAT) 1087

The Delhi Bench of the Income Tax Appellate Tribunal ( ITAT ) has held that capital gains exemption under Section 54F of the Income-tax Act, 1961 is allowable when the assessee invests sale proceeds from a capital asset into a residential property, even if the construction agreement for the new property was entered into prior to the sale.

The assessee, Avichal Kulshrestha had sold a plot of land in Faridabad for ₹86 lakh on September 26, 2016, and claimed exemption under Section 54F for investment in a flat booked with Experion Developers Pvt. Ltd. in Gurgaon.

AO Neither Rejects Nor Accepts Rectification Application on TDS credit: ITAT Remands Rs. 35k TDS Credit of Trust for Reassessment

Urmilaben H.Dave Disc Family Trust vs The ITO CITATION : 2025 TAXSCAN (ITAT) 1078

The Ahmedabad Bench of the Income Tax Appellate Tribunal (ITAT) has remanded the matter to the Assessing Officer (AO) for fresh adjudication, directing verification of a Tax Deducted at Source (TDS) credit claim of Rs. 35,493 for Assessment Year (AY) 2020-21. Urmilaben H. Dave Disc Family Trust (assessee), a trust filed its income tax return for AY 2020-21 on 24.10.2020, declaring a total income of Rs. 3,52,130 and claiming a refund of Rs. 30,026. The AO issued an intimation disallowing the TDS credit of Rs. 35,493.

The assessee filed a rectification application which was supported by Form 26AS of trustee Hasmukhbhai S. Dave, asserting that the TDS was deducted in the trustee’s name but belonged to the trust. The AO neither accepted nor rejected the application.

Relief to SpiceJet: ITAT Dismisses Income Tax Department Appeals on Supplementary Rent Disallowance

Deputy Commissioner of Income Tax vs Spicejet Limited

CITATION : 2025 TAXSCAN (ITAT) 1095

The Delhi Bench of the Income Tax Appellate Tribunal (ITAT) ruled that supplementary rent payments are exempt from tax in India under Section 10(15A) of the Income Tax Act, 1961, and not subject to disallowance under Section 40(a)(i) of the Income Tax Act. SpiceJet Limited (assessee), a company faced scrutiny for AY 2020-21 and AY 2021-22. The Assessing Officer (AO) disallowed Rs. 1,16,32,302 and Rs. 11,66,32,06,064 for AY 2020-21, and Rs. 643,80,46,168 for AY 2021-22, on account of supplementary rent and maintenance reserve.

The Assessing Officer (AO) alleged these payments constituted royalty and required tax deduction at source under Section 40(a)(i) of the Income Tax Act.

No S.153C Income Tax Assessment if Documents only ‘Pertain to’ and do Not ‘Belong to’ Assessee: ITAT Deletes ₹85L Addition

Rachita Sahgalvs ACIT CITATION : 2025 TAXSCAN (ITAT) 1096

The Delhi Bench of the Income Tax Appellate Tribunal (ITAT) has quashed an aggregate tax addition of ₹85.88 lakh, observing that the proceedings under Section 153C of the Income Tax Act, 1961 were initiated on the basis of documents that merely “pertained to” the assessees, but did not “belong to” them. A search and seizure operation was carried out by the Income Tax Department at the premises of the Navneet Dawar Group.

During the course of this search, certain documents suggesting unaccounted property transactions were allegedly recovered. The Department was of the view that these documents belonged to Rachita Sahgal & Vivek Sahgal, and proceeded to make additions of ₹42,94,000 each in each of their assessment orders for Assessment Year 2018–19, by invoking Section 153C.

ITAT Denies Section 54F Exemption for Property Purchased in Mother's Name

Ashok Kumar vsIncome Tax Officer CITATION : 2025 TAXSCAN (ITAT) 1092

The Delhi Bench of the Income Tax Appellate Tribunal (ITAT) denied a deduction under Section 54F of the Income Tax Act, 1961, citing that it cannot be claimed for a residential property purchased in the name of the assessee’s mother.

Ashok Kumar (assessee), an individual faced scrutiny for Assessment Year (AY) 2015-16. The assessee had filed his income tax return declaring an income of Rs. 2,70,000. The assessee sold a commercial property for Rs. 1,23,00,000 on 05.02.2015 which resulted in a Long-Term Capital Gain of Rs. 78,57,794 after indexing the cost of acquisition. The assessee invested the capital gain in a residential property purchased on 30.06.2015 in the name of his mother, Smt. Promila Rani Yadav to claim deduction under section 54F of the Income Tax Act.

Loan Not Utilised for Business Purposes: ITAT upholds PCIT's Decision Directing AO to Verify Exemption u/s 14A

ThiruvenkitamVeeriah vs The Dy.Commissioner of Income-tax CITATION : 2025 TAXSCAN (ITAT) 1079

Thiruvenkitam Veeriah Reddiar (assessee), represented through his legal heir Beena Veeriah Reddy, filed his income tax return for the Assessment Year (AY) 2020-21 on 15th February 2021, declaring a total income of Rs. 12,12,490.

The Cochin Bench of the Income Tax Appellate Tribunal (ITAT) has upheld the order of the Principal Commissioner of Income Tax (PCIT) and confirmed that the deduction claimed for interest paid on a borrowed loan was not permissible, as the loan was not used for business purposes.

Cash on Hand in Real Estate Business Not Unusual, Cannot Be Taxed Solely for Demonetization Deposits: ITAT

Shree BalajiAssociates vs Income Tax Officer CITATION : 2025 TAXSCAN (ITAT) 1080

The Surat Bench of the Income Tax Appellate Tribunal (ITAT) partly allowed the appeal in a case concerning the addition of cash deposits made during the demonetization period, ruling that cash on hand in the real estate business is not unusual and cannot be entirely taxed as unexplained simply due to its deposit timing.

Shree Balaji Associates, the assessee, is a firm engaged in the real estate business. For the Assessment Year 2017–18, the assessee filed its return declaring an income of Rs. 5,44,520. During the demonetization period, the firm deposited Rs. 29 lakh in its bank account.

Relief to Reliance Motors: ITAT holds Loan to Non-Shareholder Not a Deemed Dividend

The Income TaxOfficer vs The Reliance Motor Company Ltd CITATION : 2025 TAXSCAN (ITAT) 1097

The Chennai Bench of the Income Tax Appellate Tribunal (ITAT) recently upheld an order of the Commissioner of Income Tax Appeals ( CIT(A) ) where it was held that the taxability of a loan received by the assessee is not in his hand and cannot be treated as a deemed dividend under Section 2(22)(e) of the Income Tax Act, 1961.

The assessee is a dealer in cars and motorbikes. The assessee company filed its return of income on admitting a total loss of ₹3,35,02,070. During the assessment proceedings, the Assessing Officer (AO) noticed that the assessee received a loan of ₹2,24,00,000 from M/s. MCTM Corporation Ltd., a sister concern of the assessee company.

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